Good morning, ladies and gentlemen. My name is Holly, and I will be your conference operator today. At this time, we'd like to welcome everyone to today's Vulcan Materials 2014 Second Quarter Earnings Conference Call. [Operator Instructions] I'd now like to turn today's conference over to Don James, Chairman. Please go ahead, sir.

Good morning, and thank you for your participation in our Second Quarter 2014 Earnings Call. I'm Don James, Chairman of Vulcan Materials. With me today are Tom Hill, our newly promoted President and Chief Executive Officer; and John McPherson, our newly promoted Executive Vice President, Chief Financial and Strategy Officer. Hopefully, you saw our July 14 press release announcing the election of Tom and John to their new senior leadership positions. These elections were the culmination of a multiyear management succession process by Vulcan's Board of Directors to develop a new senior leadership team with diverse and broad-based experience as well as demonstrated management success and leadership skills. The bios of the 4 members of our new senior leadership team are included in the July 14 press release. Importantly, you should note that each of these individuals has been successful as a line manager in at least one of our regional businesses. We are very pleased that this new team is now in place to lead the company. In a moment, Tom and John will take you through our quarterly results and outlook for the remainder of the year as well as respond to your questions. Personally, I'll miss having the opportunity in the future to engage and interact with many of you about what makes Vulcan Materials Company such a great company with lasting value. While Tom and John, along with Mark Warren, our Director of Investor Relations, will be directly engaged with you on investor relations matters going forward, I will continue to be available to you and your organizations as requested. I'm excited about the opportunities for Vulcan going forward, led by our new senior management team. Aggregates shipments have increased sharply year-to-date and have improved year-over-year for 5 consecutive quarters. Our price improvement is widespread. More…

Thank you, Don. And also, welcome to Vulcan's Second Quarter Earnings Call. Before we get into the details of the second quarter results, we would like to highlight the progress that we have made in our efforts to improve profitability. Turning your attention to Slide 4. You see that, over the last 24 months, we've improved our EBIT by $169 million on just a 4% increase in aggregates demand. We are very pleased with this growth in earnings, and it highlights our commitment to cost control, pricing and customer service. We've improved our core profitability significantly, and we have positioned ourselves to capitalize on the accelerating volume recovery. We remain acutely focused on our profit-improvement actions and maximizing our strong operating leverage in this time of growing recovery. Taking a closer look at the aggregates segment results on Slide 5. You see the resulting revenue and gross profit impact from higher shipments and pricing. Aggregates volumes increased over 10% and pricing increased 3% on a freight-adjusted basis. This, along with our expanded product offering in transportation and materials handling services, led to a 17% increase in segment revenue. In the second quarter, incremental earnings on higher aggregates volumes were in line with our longer-term expectations of approximately 60%. Transportation and material handling services, which are key to our aggregates business, generated higher sales and earnings versus the prior year second quarter. Growing our transportation services, mainly truck brokerage services, has been a focus area for revenue and earnings growth. The truck brokerage requires little to no capital. These transportation services add incremental sales and earnings and allow us to better serve the needs of our customers. However, incremental margins are significantly less than earnings on each incremental ton produced and sold. That said, the earnings leverage on increased volume led…

Thanks, Tom. Now let's take a look at our conversion of incremental aggregates shipments into incremental profits in a bit more detail. Slide 7 compares our growth in aggregates shipments and our growth in segment gross profit for each of the second quarter, first half and trailing 12 months. In the second quarter, for example, we grew aggregates segment gross profits by $35 million over the same quarter a year ago, and we did that on just 4 million tons of increase in shipments. Looked at a bit differently, we added approximately $58 million in incremental direct revenue from aggregates shipments in the quarter, and the gross profit flow-through on those incremental revenues was approximately 60%, as Tom mentioned. Looking over longer periods, you see similar trends. Over the first half of 2014 and the trailing 12 months, we've grown segment gross profits at approximately 3.5x the rate of growth in shipments. As you've heard Tom highlight, our team, of course, remains very focused on growing profits at a rate well in excess of shipments. Now let's go to Slide 8 to look at the strong and improving unit margins that underpin these results. This slide highlights our results on a per-ton basis. And as you can see, we've continued to improve our already strong unit margins significantly despite relatively modest price increases in the early stages of the recovery. As Tom mentioned, second quarter cash gross profit per ton of $5 was a new record level for our aggregates business. At $4.51, our trailing 12-month cash gross profit per ton is 34% higher than it was at the end of the first quarter in 2006, our prior peak period in volume, when our annual rate of shipments was approximately 130 million tons higher than it is today. Again, these…

Thanks, John. Next I'd like to talk briefly about our non-aggregates results, of which concrete and asphalt are highlighted on Slide 9. In the second quarter, our concrete segment's gross profit improved from a loss of $6 million last year to gross profit of $3 million in the current year. This year-over-year improvement resulted from sales of our Florida-area concrete business in the first quarter, from an 18% improvement in volume and from higher unit profitability in our remaining operations. On a like-for-like basis, volume and price improved, benefiting from growth in private construction activity. In our asphalt segment, second quarter gross profit was in line with the prior year. Asphalt volumes increased slightly from the prior year, and material margins improved slightly due mostly to lower cost for liquid asphalt. However, drying costs and depreciation were higher than prior year. Next, John and I would like to discuss the full year outlook. I will first give a few comments on our current forecast for aggregates demand by end market, and then John will give some highlights about key assumptions we have made regarding our full year earnings results. Turning now to Slide 10. You see a breakdown of our expectations for aggregates demand by each of the major end markets. For construction, both residential and nonresidential continue to lead demand growth. In the private market segment, Vulcan-served markets are growing faster than the rest of the U.S. We expect residential growth to continue to be broad-based across our geography, led by key states such as Arizona, California, Florida and Texas. We're also seeing residential construction activity and aggregate demand recover rapidly in important Vulcan markets such as Atlanta, Baltimore, Charlotte and Nashville. In private nonresidential, our markets are beginning to benefit from growth in office and commercial work as…

Thanks, Tom. So as you can tell, we're not only excited by our recent performance, but we're also very confident in the overall momentum we see across our markets, both for the balance of 2014 as well as into 2015. Turning to Slide 11. I'll touch briefly on our current outlook for the full year before handing the call back to Tom. For ease of comparison, we formatted the slides similarly to the one in our February earnings call. We now forecast full year volume growth to be 7% to 9% above the prior year. That compares to our prior forecast of 4% to 7% growth. Our backlogs and recent sales momentum remain quite strong. And although we remain far below any measure of normalized demand, the recovery appears to be gaining steam, and our local sales teams are doing an excellent job in growing our business. We continue to see full year pricing up 3% to 5% over the prior year. Our recent pricing gains have been broad-based geographically, and as discussed, the overall pricing climate is improving across the majority of our markets. We're continuing to see improving prices as we book new business week-to-week and month-to-month. We expect our other segments, which include asphalt mix, ready-mixed concrete and calcium, to report $40 million to $50 million of gross profit collectively for the full year, toward the lower end of our prior forecast. Our asphalt volumes in the Western U.S. have trailed plan due to delays in several key projects, pushing the revenue and profitability from those activities into 2015. As previously indicated, full year SAG costs should remain in line with the prior year and lower on a percentage of sales basis. We remain very focused on continually improving the productivity of our sales and G&A investments. Full year interest expense remains unchanged at $165 million to $170 million, down from $202 million the prior year, not including the onetime charges associated with our debt tender transaction. We've revised our full year capital spending slightly from $220 million to $240 million. Given our current sales momentum and outlook, we have excellent opportunities to invest further in production efficiencies and distribution capabilities and to do so at very attractive returns. This capital spending will allow us to take advantage of those opportunities now and to prepare for the growth we see ahead of us. With that, I'll turn the call back over to Tom for some final remarks.

Thanks, John. In closing, we are well positioned to capitalize on the multiyear recovery in demand that we believe is in front of us. And we expect 2014 to be another year of earnings growth. Thus far in this recovery, we have leveraged modest but accelerating volume growth into strong growth in earnings. This is due to the operating leverage in our aggregates business and the disciplined execution of our operations and sales teams. This performance by our teams gives us tremendous earnings upside as volume recovery continues. John referenced opportunities to reinvest in our existing assets to enhance our profitability and grow earnings and returns. We are also very active in pursuing value-enhancing acquisitions. In July, we closed on a transaction that added 4 quarries that complement and grow our existing business in the San Francisco Bay Area. We're excited about these operations and look forward to their contributions to Vulcan's future results. We continue to see opportunities for bolt-on aggregate acquisitions. We will pursue these opportunities while staying disciplined in our approach. Over the last 3 weeks, our senior management team has been traveling across the country meeting with our management teams throughout Vulcan's footprint. Our people are excited about Vulcan's future. They see what I see: a company that is in a new phase of robust growth that will be strategic and very rewarding to our employees and shareholders. The recovery that is occurring across America is encouraging, but our people are not waiting for recovery. They are making it happen every day, creating new opportunities for Vulcan to grow ever stronger and more profitable. Our people are totally focused on strategic growth, growing our volumes, growing our profitability and growing our footprint in the best markets in America. We are finding new opportunities every day, and our people are making the most of them. I want to thank these employees for their outstanding contributions to Vulcan Materials Company. And I want to especially thank Don James for the critical role he has played to grow our business strategically and dramatically in fast-growing and high-potential U.S. markets. Don has led this company in good times and through turbulent times into recovery. Vulcan shareholders can have great confidence in our company. This confidence comes from our unparalleled asset base and from our outstanding people. They run the best and most profitable aggregates operations in the United States, and they are completely focused on building sustained shareholder value. And now if the operator will give the required instructions, we'll be happy to respond to your questions.

[Operator Instructions] And your first question will come from the line of Ted Grace with Susquehanna.

Don, congratulations on an extraordinary career, and we wish you all the best in retirement.

Thanks, Ted. I appreciate that.

I was hoping maybe to start with John. John, could you maybe walk through a more detailed bridge of the gross profit improvement in aggregates? Just I know that you referenced to Slide 7, and I don't think the deck's available yet, but maybe if you could just walk us through kind of the impact of pricing volume. You mentioned stripping costs and repair and maintenance were up, but maybe benefits of restructuring and changes in inventory just so we can try and understand the puts and takes.

Sure. I'll just hit some highlights, and then Tom will chime in. First, just to get to the question of flow-through that many folks have asked: In the quarter, our incremental revenue from direct sales of stone, just as a reminder, was approximately $58 million. And on those revenues, our gross profit was approximately $35 million incremental gross profit, for a flow-through on the order of 60%. So just to answer that question directly, that's where our flow-through was in the quarter. Now going a little more into detail on the improvements in core profitability in the aggregates segment. And apologize, this will be detailed in the deck, if it's not available. Our gross profit per ton in the quarter was up $0.49, and our average selling price in the quarter was up $0.33. And again, that $0.16 differential is, in this quarter, mostly driven by cost improvements. And our operators did a fantastic job of leveraging volumes and driving some additional operating efficiencies. They overcame some headwinds and repair and maintenance costs and higher stripping costs. So we're very, very pleased with those results. We think our total gross profit per ton, when you look at it on a gross profit basis or a cash gross profit basis, is likely the highest in the industry, substantially higher, as in $1 or 30% higher than many others. And we also think it's the best at expanding in the industry. And we're pleased, actually, we're doing that despite relatively modest price growth. So Ted, let me stop there. Ask the additional questions, and Tom can chime in.

Ted, I think, if you look at the quarter, we actually spent more dollars on stripping and on repairs, and that was really in preparation for the third quarter, where we'll see higher volumes. And that was to free up our operations to be prepared for that. But if you look at it on a per-ton basis, I think our operating folks did a really nice job with efficiencies. On a per-ton basis, even with the spinning on stripping and repair and maintenance, our per-ton cost was down.

Order of magnitude, could you give us a sense for the combined stripping and repair and maintenance costs just so we appreciate, ballpark, what that number would look like?

Stripping was up, I think, about $0.02. And repairs and maintenance was about -- up about $0.045.

Okay, that's helpful. The second thing I was just hoping to touch on is pricing. I know you reported 3%, and you talked about broad-based gains. Could you maybe just help us maybe start by understanding the impact of geographic mix and product mix, to the extent that's possible? And just so we can get at what the underlying improvements and kind of go from there.

Well, first of all, I don't think there was a lot of impact from mix. While our pricing in the second quarter was modest, it was broad-based. And we had pricing improvements in all but one of our markets. We think there's a lot of momentum with pricing, and we've had continuous pricing over time. I think, if you look at our trailing 12-month pricing, we were up in all but one market. And if you look back a year ago, trailing 12 months in '13, our prices were all up, all but one market. And then if you look back over time, Ted, we have had price increases in 13 of the past 14 quarters. So our pricing has been very steady. An exciting part about it is we are seeing pricing momentum in all markets, and that momentum is accelerating, so we're excited about that. But I think, ultimately, when it gets down to pricing, you have to put that together to look at margin. And we're really pleased with our teams' coordinated effort in the second quarter to blend price, volume, cost and product mix to maximize profit. And their effort generated a record cash gross profit per ton of $5. And while we're very pleased with that record, based on our pricing momentum and our efficiencies in operations, we're -- we don't think that record is going to stay on long.

Okay. The last thing I'll ask before I get back is a question to come back to the margins. Well, as we look forward to the second half of 2014, would it be reasonable just to think about maintaining 60-plus-percent incrementals on the core aggregates business? Are there trends in cost we should think about? Or just any hand-holding there would be great. And I'll get back in queue.

I think the answer, Ted, is yes. This is John. 60% is appropriate to think through, through time. As we've said before, it may fluctuate a little bit quarter-to-quarter, but the answer to your question is yes. And incremental revenues, particularly those revenues that come from direct stone sales or revenues that come from trucking-related activities, just to give a reminder, those are lower margin, but they have substantially no capital associated with them, and they effectively serve to add additional profit per ton sold. So for our direct stone revenues, 60% is not a bad number. And again, just to give you a sense, Ted and others, if you take a slightly longer-term view -- again, if you look at the trailing 12 months, our price has been up on the order of 3% average selling price, but our gross profit per ton is up 20%, 19% and change. And our -- and well, actually, our gross profit per ton is up about 20%. So ultimately, that's the money that we can either reinvest or give back to shareholders, dollars and cents per ton, and that's what we're very focused on.

And the next question will come from the line of Robert Wetenhall with RBC Capital Markets.

This is actually Desi filling in for Bob. Looking at the aggregates business, I think that around 30% of your guys' volumes goes towards nonres construction activity, exclusive of roads, of course. Of that 30%, how much is going towards these energy infrastructure projects that you talked about along the gulf? I'm trying to gauge how much you guys stand to benefit from what's going on around there.

I'm not sure I can give you that exact percentage. I'll give you some flavor on nonresidential. We're actually seeing the conventional nonresidential come back strong. When I say that, I mean shopping centers, buildings and things like that. We do have a number of large projects along the coast energy related, but a lot of those are just now getting started off. We're just starting to ship 3 of them on the Texas Gulf. And actually, the ones we had planned on shipping in Louisiana have been postponed to 2015, and while that's not good news for '14, it's excellent news for 2015. But if you kind of step back and look at the traditional nonresidential growth, and these are demands for what we project for 2014 over 2013: San Diego, we project demand to be up 50% in nonres; Baltimore, up 36%; Houston, up 32%; Fresno, up 32%; Miami, up 24%; Phoenix, up 20%; and Chicago, up 20%. So there's a lot of not traditional nonresidential growth out there that we're experiencing and excited about, and the big industrial projects that we're seeing are a bonus on top of that. And like I said, we backlog a number of those, but they're just beginning to ship, and we think we'll see the majority of those big industrial projects in '15.

Great. That's really good color. And then also, turning to SAG expenses. You guys continue to expect those will be flat year-over-year, which is really impressive given the revenue growth. And as we think longer term and net sales continue to grow, and how much -- what portion of your SG&A expenses are truly variable?

It's a good question. I think, actually, very little. I think the sales expense component of that, which is, let's call it, roughly $100 million of the total SAG numbers, probably slightly less than that, the sales expense will be more variable. Over time, we'll continue to invest in sales staff and sales-related expense to drive volumes and to critically drive profitability per ton sold to meet the needs of our customers. So that component's, to a degree, variable but still at a much, much, much lower rate. Then we'll grow shipments, and then we'll grow sales, and then we'll grow profits. We absolutely plan for SAG as a percent of sales to continue to decline substantially over the next several years.

And your next question will come from the line of Kathryn Thompson with Thompson Research.

First of all, on pricing, just wanted to follow up in terms of you've seen -- given that you're seeing a greater breadth of projects now, not just an overlay of what you saw 3 to 4 years ago but more new projects and projects in all of your key 3 end markets, res, nonres and public, what is the differential in terms of the magnitude of price increases that you've been able to get for base product versus clean stone? That's part one. And then part two, how do you see that progressing, as we are in the earlier stages of recovery, in the both of the nonres and the public end markets?

I think I understand your question. When it comes to base pricing and clean stone, in this part of the recovery cycle, normally, you're able to get higher prices on clean stone than base. This year, we are starting to see that turn, which is a really good sign in that we are seeing price increases, realizing price increases in base. And we're on the cusp of that, so we're very excited about it. The clean stone pricing continues to gain momentum, and the recovery will only help those prices.

Are you seeing a different -- difference in terms of your ability to get a greater percentage increase for base relative to clean stone, just clearly on a percentage-type base?

Again, this part of the cycle, base is starting to catch up with clean stone. Clean stone, in prior quarters, has outstripped base price increases, but that is catching up and catching up rapidly.

And Kathryn, I think -- just to add, I think the answer to your question is yes. I think that the mix, over time, also helps us drive higher profitability per ton. So as you've heard from others, the mix is improving as the recovery goes forward too.

Yes. Shifting over just to public end markets, are you seeing DOT slowing in light of some of the noise we've seen around D.C.? I know we have a short-term fix. Our work certainly is not showing a meaningful change, but what are you seeing in terms of states where you have the greatest exposure, in particular how they're approaching being less reliant on federal and taking more responsibility for their own?

Well, I think before the extension of the highway bill and the additional funding, there was a lot of nervous states out there. I think, with the extension until May of 2015 and the additional $10.8 billion, those states are much more comfortable and have gone on with their programs. We're seeing, I guess, improvement in a lot of states, in a number of states which I mentioned on the call, particularly Virginia and Maryland. Virginia raised the gas tax. I think they increased funding to $800 million a year. Maryland increased their funding over 6 years by $4.4 million. So we're seeing -- we're -- excuse me, $4.4 billion. We're seeing states take a much more active role in their own destiny when it comes to highway spending. And then you are aware that Florida announced over $10 billion in highway spending for 2014, 2015. And Texas just ended a record spending year for their highway funding. So it's encouraging, but I think the extension of the highway bill and the supplemental funding have helped the states relax their nervousness about highway funding.

Another follow-up question. This is -- can straddle both nonres and public, to some extent. But what are you seeing in your key markets in terms of volumes that are contributing to preparation for the Panama Canal expansion? And how do you see that progressing over the next 18 to 24 months?

I'm thinking a lot of planning with not much action, at this point. I'd tell you that most of the ports we're seeing are talking a lot about it. People are -- have projects that they're planning, but not a lot of action at this point. There's also DOTs. For example, in Charlotte, South Carolina, they're talking about expanding the access to the ports. So it's in the very early stages of that and not seeing a lot of activity, more discussion and planning.

Kathryn, it's John. I think, maybe not in direct response to your question but just to add on, some of the incremental investment we're making in CapEx is focused on our blue-water distribution capabilities, readying our facility in Savannah, beginning to increase in capacity out of our Mexico operations, so forth and so on. So while it's not here just yet, we do see it as an important long-term trend. And we're well positioned and investing accordingly.

Okay, great. Then final question. On your truck brokerage services, how big do you want that business to be?

Well, I think we still have growth in that. The focus of that business is to take an active role in managing our logistics. It allows us to save cost, improve customer service, and it also allows us to secure transportation in times when transportation is scarce. We're seeing a little bit of that out there, so we're pressing on. I'm not sure I could quantify the exact number, except for this was part of our Profit Enhancement Plan that we worked on, have been working on for the last 2 years, and just an extension of that.

And your next question will come from the line of Garik Shmois with Longbow.

First question is just on your volume guidance. I think, previously, something that was maybe holding you back from not having a bigger guidance to start the year was some of these large Gulf Coast projects. You highlighted some are getting underway this year. Some are getting pushed out to next year. Was there any change in the cadence in these big projects that influenced your guidance? And then secondly, I guess, just a follow-up to the guidance question just because I don't believe the slide deck is yet up on the website, if you can just maybe identify which of the end markets is coming in specifically stronger than you had anticipated since the beginning of the year.

As far as the large -- the mega projects, I don't think we're seeing a lot of timing differential on any of those. We backlogged a number of those and are very pleased with them. We're shipping some of those in '14. The lion's share will come in '15. But I don't think that's what changed our guidance. It's more the underlying demand in our fundamental markets, particularly nonresidential. When it comes to we upped our -- we increased our demand in the nonresidential markets, and that's really driven by the fundamental stores, buildings, office buildings that we're seeing in all of our major metropolitan markets.

Okay. And has there been any...

And Gary, just to be -- relative to prior guidance, just to add on, I think it's really despite a reduction in our housing outlook, although that's still quite strong and robust; despite some delays in those -- and just for projects in the Gulf Coast not coming through this year. Despite those things, which are still demand right there for '15, we're still raising our forecast. And so I think the message -- just that your takeaway should be that our underlying sales momentum, as Tom said, is very, very strong.

Okay. Actually, now I was going to ask about the housing piece, so that helps address it. And I guess just my other question would be related to uses of cash moving forward. If you could just maybe prioritize your view on additional bolt-ons, how that pipeline is looking and how you balance those opportunities versus potentially continuing to up the dividend and maybe taking a look at buybacks.

I'll start and let Tom chime in. We actually have a very attractive pipeline, as we've said before, of bolt-on acquisition opportunities. And those investments are both attractive in their own right and improve the returns from the rest of our asset base. So we'll continue to pursue those in a very sensible and disciplined way, the recent acquisition in the Bay Area being a very good example. But over time, and I think has been -- as has been the legacy of Vulcan, we'll have a balanced mix between reinvesting capital in the business and returning it to shareholders. The exact form of that return, dividend, share repurchase, what have you, is really a board decision and something we'll work through over time, but you can expect us to have a balance of returning cash to shareholders and reinvesting in what we think is the most valuable aggregates footprint and set of market positions, arguably, in the world.

Okay. I guess just one last question. Just quickly, Tom, you mentioned you're starting to see a little bit of trucking constraints in your transportation businesses, supposedly set to address some of those issues. If you could provide a little bit more color around that issue and how significant of a risk this could be as volumes come back into the system potentially faster than anticipated.

Well, in this part of the cycle, I think trucking shortages are always out there. We're hearing some rumblings down in some markets. We don't have a lot of concern about that. We have ample trucking resources, but those -- when those shortages happen, they are cured very quickly. The market responds fast, with trucks coming into the market when prices go up. So we don't think there's significant risk when it comes to trucking. Actually, it's probably an opportunity for us because, if there is a shortage, we control, based on our strategy of truck brokerage, a number of those trucks, so we feel like we'll be served first. As far as transportation shortages in rail, again, in this part of the cycle, that's a possibility. We get comfortable with that because we have so much flexibility on numerous rail line, but also, we control our own destiny in a lot of those markets with brown-water and blue-water sources, where we can mix and match supply.

And your next question will come from the line of Jerry Revich with Goldman Sachs.

I'm wondering if you gentlemen are willing to step us through what parts of your network have you rolled out the truck brokerage business model. And for areas where you've rolled it out, what's the penetration rate today versus where it could ultimately be? And perhaps you could calibrate us on the margin profile. I guess the standalone truck brokerage companies are running in the mid to high single-digit range, and I'm wondering if you could calibrate us relative to that benchmark.

Our trucking business, like our aggregates business, is a local business. Each one is different. Each one is structured different, and the profitability at each one is different. We are active in California. We're active in Texas. We're active with this in the Midwest. We are active within the Southeast. But as far as trying to put a number on the percentage profitability, again, it varies by market and it varies widely by market.

It is safe to say it's well below, on a percent-of-sales basis, our core stone business, which is why we're trying to give you some transparency to it. But again, reminder, we're not owning trucks. It's very low capital for us. So we think of it as incremental returns to us and, on that basis, very attractive.

Yes, absolutely. I guess that we're just trying to understand how much runway you have in front of you. Maybe you could quantify what proportion of your shipments do you currently handle with the truck brokerage operation in areas where you're relatively far along that process, just so we can think about what the ultimate opportunity from Vulcan's standpoint is.

I think, at this point, it's a small percentage of our aggregates. We have a lot of growth in this area. And most importantly, this is to secure transportation and secure customer service as well as lower cost. But we have a long ways to go from a trucking perspective.

Okay. And then I'm wondering if you could talk about, within aggregates, just the cadence of price realizations from here based on the mix of jobs that you have coming up in the back half of the year. Can you just give us a flavor for what you expect to ship based on visibility that you have and how the pricing levels compare versus a year ago?

Okay, I'll start and let Tom give a little more flavor. As I mentioned in the script, I think what we're seeing week-to-week, month-to-month in pricing is very positive. The climate -- or pricing climate's improving in the vast majority of our markets. It's always a little bit difficult to predict for us the exact cadence because you've heard -- as you've heard us say before, we don't manage pricing in any kind of centralized way. That said, and Tom can give a little bit more flavor, all of the signs across the vast majority of our market, the lights are flashing green in terms of the improving pricing climate. And so again, we're very pleased with the gross profit per ton improvement our guys have delivered, given steady 3% pricing. And we're pretty darn excited about what those numbers can be when we get higher pricing flowing through.

We are excited about the pricing momentum. And when I say that is it continues to grow. And part of that is just the feel from our customer base. They are more confident in the market. They're more confident in their profitability, which allows pricing momentum for the aggregates business.

Okay. And then lastly, I'm wondering if you could just touch on the concrete business that you have remaining in the portfolio, where -- can you talk about the competitive landscape in terms of -- I guess, I would think, with cement capacity utilizations improving, we should see greater pricing momentum in concrete than areas where your competitors are vertically integrated. Are you seeing that? Are you seeing pricing accelerating further in concrete, where you are vertically integrated?

In the second quarter, we experienced good pricing increases in concrete. We think that, as the residential and nonresidential, the private sector, grows, the margins in our concrete business will continue to grow, just as in aggregates. And we're excited about it.

And your next question will come from the line of Jack Kasprzak with BB&T Capital Market. John F. Kasprzak - BB&T Capital Markets, Research Division: First question is, Illinois, you call out for the volume strength there, which I suppose might be a little surprising. What's driving the good volume performance there? Is it just good weather after a tough winter?

Well, good weather always helps, Jack. But what's really driving those volumes is large projects. We've secured and are shipping on a number of large transportation and infrastructure projects and O'Hare airport projects, which is helping our volumes. But we're starting to see the residential improved in West Chicago and think that will come on strong in the next 6 months to the next 18 months. John F. Kasprzak - BB&T Capital Markets, Research Division: Okay. I guess this question might be for John. You made a lot of comments around CapEx and the slight increase there. I know you won't give guidance for CapEx for next year, but I mean, do you see more of these types of projects? Do you think CapEx, given volume recovery trends, up a bit over time? Maybe, directionally, some commentary might be helpful.

Yes, I think, directionally, CapEx is not going to trend up substantially over time on a per-ton basis. Obviously, we'll raise it as we support higher volumes, but nothing that we see, from a, guess I'm going to call it, replacement operating CapEx view, has changed beyond kind of past experience. So I think those trends will continue. We'll continue to have opportunities to invest in growth: capacity additions, additional reserves, additional distribution facilities. And so I think we'll have smart opportunities for adding to our portfolio and for building out our network, but the core CapEx, the core replacement CapEx, those trends, I think, will remain the same. John F. Kasprzak - BB&T Capital Markets, Research Division: Okay. Because it seemed like, the increase, you were calling out some very specific opportunities rather than the need to make some broader investments.

It's more specific -- yes, thank you, John. Let me be more clear. It's more specific opportunities than it's any kind of fundamental change. We just wanted to be complete in the guidance, frankly. So it is additional capacity in Mexico. It's a rail yard in Savannah. It's some additional land and reserves around things we've recently acquired. It's growth- and profit-adding type capital, not any change in our fundamental operating CapEx.

Your next question will come from the line of Keith Hughes with SunTrust.

Getting back to some of the truck brokerage revenues you referred to, can you give us any kind of sense of how much that's grown in the year-over-year in the second quarter and how much in the first half?

I think, let me give you kind of, I'm going to call them, the revenues that are from all of our transportation-related activities. I'm going to -- so the revenues in our aggregates segment that are not from direct stone sales. And just to give you a rough sense, those revenues in the quarter -- and again, this is the revenues in the segment that aren't from -- that you wouldn't get if you multiplied tons times average selling price. And for the quarter, that was on the order of $112 million of revenue. Prior year quarter, that was about $83 million in revenue, so about a 35% increase.

So a good increase. And what would it be for the year-to-year then?

I don't -- for the year-to-date, I don't have it right here, but we could easily get it to you. I think, for the 6 months ended, it's about $192 million of revenue versus approximately $143 million of revenue in the prior year.

And if we -- that's close enough. I hear what you're saying.

But again, just to be clear, that's not all trucking. That includes some shipping-related revenue and some other transportation-related revenue.

No, you did the -- or what's in the aggregates. That's what the [indiscernible]...

Yes, yes. And...

If we go back several years ago, how much has that revenue grown, and just general sense? You don't have to give me specific numbers. How much, in a general sense, has that grown from pick whatever time. Has it been exponential growth? Or is this recent growth we're seeing kind of new?

I think the trucking components of it, as opposed to some of the shipping components, is exponential growth but, again, starting off a very low base. So I think what we're focused on is less the revenue growth, given the nature of this, and more the incremental gross profit we derive from it. And at the end of the day, it increases the gross profit that we receive per each ton that we sell. And as Tom said, we've got a good ways to go on that incremental gross profit. We're pleased with the results so far, but we're still in the early stages of this effort.

Okay. And the second question. We've talked a little bit about the highway bill, with the extension through May of next year. Given that it was another short-term extension, going back to the old days of short-term extensions, what are you hearing from the states as they think about spending for next year? Is this changing their plans at all? Or do they just expect something longer extended after this May patch is done?

Well, first of all, I don't think we're hearing any negativity from the states based on the extension we got. That's a pretty substantial extension to May with the $10.8 billion. So that buys them a lot of time. I think we're all cautiously optimistic that Congress will get a bill done in 2015. There's a lot of momentum in the capital for getting a highway bill, a long-term highway bill with strong funding. And you're seeing both parties in support of a long-term bill with more substantial and more solid funding. So in the states, you're seeing this also, so I don't -- we don't detect any kind of nervous behavior out of the states at this point.

Your next question will come from the line of Mike Betts with Jefferies.

I had 2 questions, if I could, please. The first is just on asphalt. And it had a great first quarter, not such a good second quarter, which you said was due, I think, to delayed projects in the West. I guess I'm trying to look at the outlook for the rest of the year. Is it likely to be more like the second quarter, with anemic growth with pretty much these big projects delayed? And what has caused those delays, if I could ask, please? And then secondly, you mentioned the 4 quarries you've acquired in San Francisco Bay Area. Can you give us some idea of either size of the investments or size of quarries, what sort of -- what we're looking at there? And with the acquisition costs referred to in the second quarter, were they related to that acquisition?

Just taking the asphalt first, the jobs are in California. They were state jobs that actually just delayed for the state. It's not that we won't do those jobs. We're just not going to be able to have those jobs in 2014. We'll service those jobs in 2015. We're pleased with our asphalt performance. Over time, it gives us very nice returns. As far as how we see the year going forward, I think our asphalt business will have better quarters than we did in the second quarter, but again, the volume will affect that. The quarries that we purchased in the San Francisco Bay Area, they were -- there were 4 operations, 2 of which were operational. We acquired about 120 million tons of permitted reserves, which, as you know, is very important and hard to do in California. So we're very pleased with them. It's complementary to our operations in the Bay Area, and we look forward to having those operations in the Vulcan family. As far as our price, that's confidential, and we could not reveal that.

Understood. Can you reveal the sort of annual production? Is it a couple of million tons? Is that the sort of level that you're seeing coming out of those at the moment?

Probably a little under 1 million tons at this point.

The next question will come from the line of Stanley Elliott with Stifel. Stanley S. Elliott - Stifel, Nicolaus & Company, Incorporated, Research Division: Most of the questions have been answered. So quickly, for the analyst event coming up in September, can you guys give us any sort of high-level thoughts on what investors should expect as we're heading into the event, by chance?

I think, as you'd expect, we would like to take the advantage just to, frankly, as a new management team and new leadership team, have a chance to interact with the investment community longer than we can in a call or another meeting. And we'd also like to lay out what our vision is as a management team for what the company can do going forward. You should not expect it to be some dramatic announcement of a strategy shift. That's not it, but we would like to tell you where we think the company can get to in 1, 3 and 5 years. So that's the kind of discussion you should expect.

Thank you. Now I would like to turn today's call back over to Tom Hill for some closing remarks.

Thank you very much for your interest in Vulcan Materials Company. We're excited about the markets and the demand going forward. And we look forward to seeing you and talking to you in the third quarter. Thank you.

Thank you for your participation on today's conference call. You may now disconnect.